By Perry Diaz
The National Grid Corporation of the Philippines (NGCP) is a privately owned corporation that was created on January 15, 2009. It is a consortium of three corporations, namely, One Taipan Holdings, Calaca High Power Corporation, and the State Grid Corporation of China (SGCC). SGCC has a 40% stake while the other two – both Filipino-owned – have 30% each. The NGCP’s Board of Directors has 10 members of which four are SGCC nominees. While SGCC doesn’t have majority control of the business, it is owned by China.
The NGCP is in charge of operating, managing, maintaining, and developing the country’s state-owned power grid, the National Transmission Corporation (Transco). That gives NGCP full control of the country’s electricity and as such could, at its discretion, shut down power throughout the country. While it seems unlikely for NGCP to shut it down for no reason at all, it could, however, accidentally be shut off or sabotaged. But who and how would it be sabotaged?
A few months ago, Transco President Melvin Matibag told a Senate panel “it was possible for a hostile third party such as China to disable the country’s power grid remotely.” Immediately, Sen. Risa Hontiveros called for a Senate investigation. Consequently, Defense Secretary Delfin Lorenzana announced that the Defense and Energy departments would probe allegations that Chinese engineers have gained access to “key elements of the system” that power could be deactivated remotely on Beijing’s order. Besides, there is a constitutional requirement that limits such access to Filipinos only.
Sinophobia
However, one industry observer has said, “Let’s grant for the sake of argument that they can shut down, this action would destroy their worldwide investments as well as future foreign ventures. They’re in business and want to grow. People can weave myths, but can they prove it? They’re exploiting sinophobia.”
But Matibag claims that there is “fear of the public as to the issue of national security.” He criticized the NGCP for not having an “open book” and not willing to be audited. But NGCP denied Matibag’s allegation. Matibag then proposed a meeting between NPCG and representatives from the Department of National Defense and the Department of Information and Communications Technology to discuss national security protocols.
Meanwhile, in an attempt to diffuse the controversy, President Rodrigo Duterte downplayed the likelihood of China shutting down the Philippines’ power supply. But true to his character, he promised to “quarrel” with China if it interferes with the electricity system.
“China, if you do that, there will be a quarrel. I may not overcome you but you will receive from me a mouthful then I will go to other places and look for help,” he said. But before he made the threat, Duterte made it clear he does not think China would shut down the country’s power supply.
Terminating VFA
But that was before Duterte notified the U.S. that he was terminating the Visiting Forces Agreement (VFA) in six months. Which makes one wonder: without the VFA, where would Duterte go to look for help in the event that he ends up quarreling with China? The Philippines has a navy with a few coast guard cutters and an air force with one squadron of fighters. China could wipe them out within a day.
The Philippines and Australia have an agreement similar to the VFA. But the Australian-Philippines Status of Visiting Forces Agreement (SOVFA) is not by any means as strong as the US-Philippines VFA. Signed in 2007 and ratified by the Senate in 2012, the SOVFA is used for joint military exercises between the two countries. However, in the event of war, it’s unlikely that Australia would come to the aid of the Philippines unless the U.S. is involved. The U.S. and Australia have a Mutual Defense Treaty (MDT), which obligates either country to come to the aid of the other in the event of third-party aggression.
And what other places had Duterte in mind? Japan, South Korea, or any of the ASEAN countries? I don’t think any of these “places” would get involved in a China-Philippines dispute. And at this point, I don’t think the U.S. would get involved either regardless of the U.S.-Philippines MDT; not after Duterte terminated VFA. The 1987 Constitution bans foreign troops on Philippine soil. So, how can the U.S. defend the Philippines if American troops are not allowed to set foot on Philippine soil because of the termination of VFA?
Power vacuum
And this brings to the fore the question: Who would fill the power vacuum created when the U.S. leaves the Philippines? Probably China and Russia would scramble to fill the void. But China, with so much invested in the Philippine economy, would probably move to protect its economic, political, and geographical interests in the Philippines.
Which reminds me when China grabbed the Panganiban (Mischief) Reef in the middle of the night in 1994; two years after the U.S. bases were unceremoniously ejected from the Philippines. Today, Panganiban Reef has been reclaimed and converted into air and naval base by China. It is less than 100 miles from Palawan province. Missiles launched from Mischief Reef could hit Manila or Davao — where Duterte lives — in less than five minutes.
So, how would China take over the Philippines? Easy. China doesn’t have to fire a single shot. With the power grid under the control of SGCC, all Beijing has to do is inject malware into the software, which would put the power grid out of commission. The system can be remotely accessed and takes only click on the keyboard, which would plunge the entire Philippines into darkness. No power, no electricity, and the media blacked out. The government would grind to a halt.
But, perhaps, China would be kind enough not to punish the 100 million Filipinos by shutting off its electricity. That would be very cruel. But how about issuing a threat to shut off the power grid? That’s more civilized and it wouldn’t hurt a soul unless Duterte would accede to Chinese President Xi Jinping’s demands.
Geopolitical repercussion
At that point, Duterte would probably swallow his pride and invoke Article 5 of the MDT, which is: Subject to Article 4, “An attack on either of the Parties, or on the island territories under its jurisdiction in the Pacific or on its armed forces, public vessels or aircraft in the Pacific,” either party “would act to meet the common dangers in accordance with its constitutional processes.”
The question is: How would the U.S. Congress respond to the Philippines’ request for military intervention to stop Chinese aggression?
The War Powers Act of 1973 requires the U.S. president to notify Congress within 48 hours of committing armed forces to military action and forbids armed forces from remaining for more than 60 days. While this has been violated in the past – for example, by President Bill Clinton in 1999, during the bombing campaign in Kosovo – the situation in the Philippines could trigger a war with China if the U.S. intervenes. But President Donald Trump would probably be hesitant to commit the U.S. armed forces against China on the disputed South China Sea unless he gets something substantial in return.
Without American military support, Duterte would be helplessly at the mercy of Xi. And without any other option, Duterte would likely beg Xi to allow the country’s power restored. But there is a price – stiff price – to pay for that: surrender Philippine sovereignty and become a province of China.
This scenario could happen only because we lost our military alliance with the U.S. and because Senator, Ronald “Bato” dela Rosa’s U.S. visa was cancelled by the U.S. State Department, which prompted President Duterte to retaliate by terminating the VFA. Whoa! Losing a military alliance for one person’s visa?
But wait a minute! The VFA has a six-month termination timeline, which means that it is still in effect until August 2020. Duterte can swallow his ego and cancel the VFA’s termination. But here’s where geopolitics comes into play. Trump, being a transactional president, would probably ask for more concessions from the Philippines. And these could include air and naval bases and “boots on the ground.” In other words, Duterte would save Philippine sovereignty and have America’s security umbrella at no cost to the Philippines. Not a bad deal after all.